Nigerian Fintechs Move to Begin Deduction of N50 Electronic Money Transfer, Sparks Public Backlash

Starting Monday, September 9, 2024, several Fintech companies in Nigeria have notified their customers about the upcoming deduction of N50 electronic Money Transfer Levy (EMTL) on all electronic transfers of N10,000 and above.

This levy, mandated by the Federal Inland Revenue Service (FIRS), follows the Electronic Money Transfer Levy Regulations, 2022, which aims to boost government revenue from digital transactions. The regulation extends to both personal and business accounts, with exceptions for transfers below N10,000 or transfers between accounts of the same owner within the same bank.

However, the introduction of this levy has sparked widespread backlash, with several Nigerians voicing their concerns on X platform (formerly Twitter). Many view the levy as excessive taxation, accusing the Bola Tinubu-led administration of burdening citizens without transparent use of public funds.

Check out some reactions on X,

@ TaiwoMuyiwa3 wrote,

“Federal government continue to extort every organization in this country but failed to attend to the needs of the people they govern. Price of everything in this country is ridiculously high but they are unconcerned by it. Misplaced priorities.”

@realTobiAkinbo wrote,

“FIRS has also directed Fintech companies to charge a N50 naira levy on transfers above N10,000, this is a plot to further extort the poor masses. It’s criminal and illegal”.

@obaroddy wrote,

“The Tinubu tax and income thieves have finally descended on OPAY and Fintech apps with the EMTL levy of N50 for every transaction above N10000. When will this craziness stop?”

@ibrulezz wrote,

“FIRS has instructed Fintech companies to impose a N50 levy on transactions exceeding N10,000. This move appears to be an attempt to further burden the already struggling low-income population, sparking questions about its legitimacy.”

Nigerian Economists, Marcel Okeke, a former Chief Economist at Zenith Bank, has also expressed concern about the levy, warning of the potential economic consequences. He criticized the move as ill-timed, suggesting that it could deter the adoption of digital financial services, harm fintech innovation, and ultimately damage the economy.

Also commenting on the fintech tax levy, another Nigerian economist, Alias Aliyu, described the levy as a “desperate move” to increase revenue, especially given the current economic hardships Nigerians are facing, including the recent 10% VAT hike and the floating of the naira.

Notably, there strong are calls from citizens urging the government to focus on regulating the fintech sector, addressing cybersecurity concerns, and curbing prevalent issues like the proliferation of loan sharks, rather than imposing more financial burdens on the public. Despite the criticism, the Federal Government sees the EMTL as a necessary measure to support its revenue generation efforts.